# Define: Point-And-Figure Chart

### What is the dictionary definition of Point-And-Figure Chart?

#### Dictionary Definition

Point and Figure (P&F) charts display day-to-day price movements without taking into consideration the passage of time. Point and Figure charts are composed of a number of columns that either consist of a series of stacked Xs or Os. A column of Xs is used to illustrate a rising price, while Os represent a falling price.

#### Full Definition of Point-And-Figure Chart

A point-and-figure chart shows filtered price movements of a stock over time and is used by technical analysts to determine price support and resistance levels for a given stock. Price movements on a point-and-figure chart are represented as either a rising column of Xs or a falling column of Os. Each column on a point-and-figure chart indicates an uptrend or a downtrend. New columns are added to the point-and-figure chart when the stock price changes direction by a pre-determined reversal amount. Technical analysts who use the point-and-figure chart method cite its ability to filter out insignificant price movements and remove the effects of time as reasons for preferring point-and-figure chart information to more traditional bar charts. In addition, a point-and-figure chart makes trend lines easy to recognize.

Point and figure charts are constructed as follows:

• Price movements are plotted in columns of X’s and O’s.
• Each X represents a positive price movement based on a user-selected price ‘box’.
• If the plot is in a column of X’s and the daily high price exceeds the previous x by at least the box number, then 1 or more X ‘s are added to the column (an X for each box over the previous X).
• If the daily high price is above the current X, but less than the box price, the plot doesn’t change.
• If you are in a column of  X’s and the daily low is more than the ‘reversal’ amount, then you move to a column of O’s.
• Each O represents a negative price movement based upon the box price.
• The O column functions similarly, but with respect to price decreases (e.g. if today’s low is less than the previous O minus one box, new O’s are plotted, etc.).

Point and Figure charts reduce complex price oscillations to a simple format which only displays significant price moves, providing an extremely insightful view of the price movement.

#### Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/point-and-figure-chart/
Modern Language Association (MLA):
Point-And-Figure Chart. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 05, 2020 https://payrollheaven.com/define/point-and-figure-chart/.
Chicago Manual of Style (CMS):
Point-And-Figure Chart. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/point-and-figure-chart/ (accessed: April 05, 2020).
American Psychological Association (APA):
Point-And-Figure Chart. PayrollHeaven.com. Retrieved April 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/point-and-figure-chart/

#### Definition Sources

Definitions for Point-And-Figure Chart are sourced/syndicated and enhanced from:

• A Dictionary of Economics (Oxford Quick Reference)
• Oxford Dictionary Of Accounting
• Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd March, 2020